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Bonds, Ignoring Strong Reports, Are Unchanged

Prices of Treasury securities were little changed in choppy trading yesterday in an abbreviated session ahead of a long holiday weekend. The market will be closed Monday for Martin Luther King Jr. Day.

The 30-year bond was unchanged at a price of 9528/32 for a yield of 6.83 percent.

Traders attributed whatever price gains the market managed in the short session to a strong dollar and an article in The Washington Post that asserted that senior officials of the Federal Reserve appeared unlikely to raise short-term interest rates anytime soon as a precaution against a resurgence of inflation.

The market's friendly tone was only temporarily interrupted by the Government's reports on trade and industrial production yesterday. November international trade figures showed little change, as the deficit widened 4.9 percent, to $8.4 billion, from the $8 billion in October. That was well under expectations of the deficit's widening in November to $9.8 billion after shrinking 30 percent the month before.

Industrial production and capacity utilization in December continued to expand, as production rose eight-tenths of a percent, compared with estimates of seven-tenths of a percent, and November's number was revised lower by one-tenth of a percentage point, to an increase of eight-tenths of a percent. Capacity reached its highest level of the year in December, to 83.8 percent, up from 83.3 percent in November and higher than the 83.5 percent economists had expected. However, it is still below levels that raise fears of bottlenecks and potential inflation pressures.

Traders said the negative impact of the economic news was short-lived, as consumer confidence fell. The University of Michigan's preliminary index of consumer sentiment this month fell to 96 from 96.9 in December.

Max Bublitz, president of Conseco Capital Management, Carmel, Ind., said that until the last Federal Open Market Committee meeting in December, he had expected the Fed to tighten. But, he said, it appeared to him that Alan Greenspan, the Fed chairman, had since made it clear he would not raise interest rates unless there was a sharp rise in inflationary pressures.